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Despite the departure of anchor tenants such as HMV and Starbucks, Robson Street — the second-most-expensive retail street in Canada after Toronto’s Bloor Street — is far from dead, according to local retail experts.

The street is a vibrant area going through a time of transition and speculation, with landlords wanting to get top dollar, but retailers hesitant to pay high rental rates, said David Ian Gray, retail consultant with the firm DIG360.

“It’s an interesting time. Robson is in this state of flux,” Gray said. “But when you see the J Crews, the CB2s and the Forever 21s coming in, it’s not a dead street.”

Some deals may be stalled over speculation as to who might take over the now vacant HMV space, what the transition of the Pacific Centre Sears store will look like, or whether an Apple store opens on Robson Street, he added.

Unlike a shopping mall, where there is one landlord that can be strategic and have a vision for the future, Gray pointed out each retailer on Robson must negotiate with a different landlord, meaning transitions take time.

“This is whole eclectic collection of corporate, entrepreneurial landlords all trying to cut deals and guess at what the future is going to look like,” Gray said. “Meanwhile, you’ve got retail chains, some of which need to make money in a location, and others are being very patient waiting for the ideal location to make a brand statement, like the HMV site.”

However, a new report by Colliers International found the price of rent on Robson fell by 25-per-cent year over year on leases signed during the nine months ending March 31, but the decline is not an indication the street is losing its cachet, according to James Smerdon, Colliers’ director of retail and strategic planning in Vancouver.

Monthly retail rents for new lease deals on Robson averaged $150 per square foot — a bargain price for international retailers, who pay an average of $2,250 per square foot on New York’s Fifth Avenue, which tops Colliers’ global list.

The drop in rent on Robson is a result of a few large stores opening in mid-block locations on the upscale street, rather than on the corner, where rents are typically higher, Smerdon said.

“J Crew, rather than being on the corner as say, Banana Republic is, or some of the other fashion stores are, is in a mid-block location,” he offered as an example, adding there are a few other larger-format, mid-block stores that have recently signed leases, such as Forever 21.

While the Colliers report showed most retail areas in Canada saw increases in new lease rates, Vancouver’s Robson Street saw the sharpest decline in the country, something Smerdon said is due to the type of deals reported in the survey, which only asked about recent prominent deals such as Forever 21 and J Crew.

“This isn’t an average rate, it’s a survey of recent and notable transactions,” he said.

And while there are a number of vacancies on the street, notably the former HMV store, Robson is still a flourishing shopping spot, Smerdon said, citing the fact that Caffe Artigiano snapped up the Starbucks store that is closing on Robson and Thurlow.

“The fact that there’s another coffee shop going into that space suggests that their rent didn’t go down from what Starbucks was offered, which suggests that they’re going to be paying rent that is higher than what Starbucks was going to pay,” Smerdon said. “I think when the details come out about that lease, we will all see that Robson Street is a thriving and healthy retail environment.”

Meanwhile, Alberni Street, which runs parallel to Robson, saw a 10 per cent increase in rents to an average of $105 per square foot, with the opening of Tiffany & Co. and Brooks Brothers, while Fourth Avenue’s rents were flat at $48 per square foot.

“Vancouver is in the wonderful position of having a number of high-end, fashion-oriented tourist streets,” Smerdon said. “Robson is no longer, if it ever was, the only game in town. You have all these other areas that tourists go to.”

Luxury retailers are doing very well in Canada, said DIG360’s Gray, but high streets such as Robson may have hit a plateau. Nonetheless, Gray said he didn’t think any landlords would be keen to sign leases for as low as $150 per square foot, although there could be some good opportunities for retailers.

“At the end of the day, Robson Street is still a vibrant collection of retail stores within a few blocks,” Gray said.

According to the Colliers’ survey, new leases were most expensive on Toronto’s Bloor Street, where rents averaged about $310 per square foot, followed by Robson Street, Alberni Street, and Montreal’s Rue de la Montagne, where new lease rates averaged $80 per square foot.

tsherlock@vancouversun.com

Blog: vancouversun.com/yourmoney

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